(SOLVED) Kubin Company’s relevant range of production is 24,000 to 31,000 units. When it produces and sells 27,500 units, its average costs per unit are

Discipline: Accounting

Type of Paper: Question-Answer

Academic Level: Undergrad. (yrs 1-2)

Paper Format: APA

Pages: 1 Words: 218

Question

Kubin Company’s relevant range of production is 24,000 to 31,000 units. When it produces and sells 27,500 units, its average costs per unit are as follows:

                                                                                Average Cost per Unit

Direct materials

$ 8.40

Direct labor

$ 5.40

Variable manufacturing overhead

$ 2.90

Fixed manufacturing overhead

$ 6.40

Fixed selling expense

$ 4.90

Fixed administrative expense

$ 3.90

Sales commissions

$ 2.40

Variable administrative expense

$ 1.90


Assume the cost object is the Manufacturing Department and that its total output is 27,500 units.


a.

How much total manufacturing cost is directly traceable to the Manufacturing Department? (Round per unit values to 2 decimal places.)


b.

How much total manufacturing cost is an indirect cost that cannot be easily traced to the Manufacturing Department?


Expert Solution Preview


It is given that Kubin Company’s total output is 27,500 units. The cost object is the manufacturing department and its total output s also 27,500 units. This means that there is only one manufacturing department of Kubin Company. Therefore all the manufacturing costs incurred are directly traceable to....